reDesign

September 22, 2011

Google and antitrust: How Google favors its own products

Filed under: google, search — Rakesh Agrawal @ 7:17 pm

This is the second in a multi-part series on Google and antitrust. Part 1 looked at how difficult it would be for a new player to start in Web search today.

Part 1: Competing in Web search against Google would be extremely hard

Part 2: How Google favors its own products

Part 3: Looking at the good and bad effects of monopolies

Disclosures: I worked on AOL Search from 2004-2007, where Google was our algorithmic search partner. Any assessments of financial models are based on publicly released information and not any specific information I had access to regarding the terms of the AOL-Google deal or our negotiations with Google and Microsoft. My brother is currently employed by Google and I have many friends there. I went to high school with Google CEO Larry Page.

You don’t see algorithmic results

Google likes to say that the algorithmic results are untainted; that they’re based solely on hundreds of signals that mere mortals couldn’t possibly understand. That is true. But it’s also not a meaningful statement, because you often don’t see algorithmic results.

Atop the algorithmic results, you’ll see special content that favors Google products. Queries for stock quotes, maps, products and others highlight this content.

Google also blends in to its algorithmic results content from maps, news and social search. A result from Google Places can take the screen real estate of 6 or 7 algorithmic results. How do you tell other results result from an algorithmic result as a consumer? They’re not labeled. Experts can figure it out. But consumers consider them to be algorithmic results. More accurately, consumers don’t care — they trust Google to be impartial and bring them the best of the Web.

Even when Google presents its own content in the algorithmic order, it can give it special presentation that other sites don’t get. Consider this screenshot:

Comparison of organic results in Google search

Comparison of organic results in Google search

For the sake of argument, assume that YouTube had ranked lower than the original content on Bloomberg. The enhanced presentation of the YouTube video, with a thumbnail, duration and time stamp would drive more traffic.

Tying of other products (like social)

Google also integrates new products into Google’s Web search. If you happen to follow an account on Google+ and that person posts content that matches your search term, it will move up in the rankings for you. In this example, I did a search for “Rick Santorum” and the 10th result is a story by Danny Sullivan. It showed up there because I follow Danny on Google+.

Google+ gets preferential treatment in search results

Google+ gets preferential treatment in search results. Three of the four links in this result go to Google+.

When I do that search while logged out, the same result appears on page 2 in position 16. That’s a significant disadvantage as many searchers don’t go past the first page.

This creates an incentive for a) people to create an account on Google+ and b) people to share articles on Google+. The annotation also increases the likelihood of a click. Three of the four links in that result above go not to Danny’s article on Search Engine Land, but to Google+.

These incentives are especially critical right now when Google+ is struggling to gain meaningful adoption. On its own merits, I would not currently recommend that clients spend time on Google+. But because of the potential effect on Google Web search results, I think it makes sense for many businesses.

Google provides similar treatment for some links shared on Twitter, but this seems to be reduced now that Google is no longer licensing Twitter’s firehose. Even when it does appear, there is one link to Twitter compared with the three links Google gives to Google+.

In addition to the explicit incentives that Google creates, there are the implicit incentives created by Google’s black-box ranking algorithms. Legions of SEOs with no inside knowledge Make Shit Up. They advise clients how they can please Google’s algorithm Gods, often by making more use of other Google properties. (Which, of course, said SEOs can assist them with.)

Advertiser products

Google bundles several discrete ad products together. In some cases, it is impossible for advertisers to opt out of certain properties that they might not want to buy.

In other cases, Google offers a wide range of other ad products that can be easily purchased with the primary Web search advertising buy. Advertisers can easily buy into the contextual ad network, mobile ads, etc. From an efficiency standpoint, this makes things much easier for advertisers. But the net effect is that Google can take more share of limited advertising dollars.

Ben Edelman, an assistant professor at Harvard Business School, wrote a great analysis of how Google’s practices affect advertisers. That was a topic that didn’t get much consideration in the Senate’s hearings.

Next in this series, I’ll look at good and bad aspects of monopolies.

About these ads

6 Comments »

  1. Rocky, please check how Google is making ads almost invisible as ads with light bg color and not labeling them clearly. They added an inch (!) of extra white space on top so on many e-commerce searches only ads r shown for average screen resolutions. Very evil bc is costing my small shop and many others money.

    Comment by Rob — September 22, 2011 @ 8:41 pm

  2. You can test them on different monitors and lights. Very hard to detect ads many cases.

    Comment by Rob — September 22, 2011 @ 8:42 pm

  3. Rob –

    Sorry, but 1) I think this is an exaggeration and 2) in practice I don’t think it’s evil.

    Let me explain with an example:

    Try typing in “Sony Vaio.” On my (normal-sized) monitor, I see 10 sites come up on the “center” screen (plus two relevant Vaio e-commerce ads on the side, from Newegg and Sears). The first three are ads – and yes, these ads have only a slight yellow or off-white background. You say the almost-white backgrounds “tricks” the consumer into believing these are organic results. I saw that a less “bright” yellow actually decreases the “highlight the ads” tendency of bright colors. In the end, the two factors may offset.

    However, let’s look at the content of the ads, and let’s see what gets left out, in trying to determine whether the end result is “evil” or not. The first ad is for store.sony.com/VAIO. It contains six links below, including “VAIO Weekly Deals” and “Compare ALL VAIO Laptops.” These seem like very relevant ads, probably a result of Google’s high-quality (and expensive) ad auction process. The second and third ads are from The Sony Official Store (for the Sony Vaio Y Seriese) and from Target, with a link to buy a 15.5″ Vaio. There are also two pictures of Vaio laptops in the “ads” section.

    So, what are the two sites that have been “bumped off” by adding in the black top bar, 6 extra links in the ad space and 2 extra links below the top result (also the Sony Store)?

    Newegg.com’s Vaio brand page and Cnet’s Vaio SZ Review page. Are these relevant? Yes. But in the case of Newegg, we already have multiple relevant e-commerce links within the top results (buy.com, Amazon, Sony Store). Why is it “evil” to leave out Newegg and the Cnet review page from my monitor? If I specifically want Vaio reviews, I can type in “Sony Vaio Reviews” and get Cnet, Engadget, NotebookReview, etc. all on the first page. However, to learn more about the Vaio the Google results are very relevant to me as a consumer, and the #1 ad (Sony Vaio official site) is actually the most relevant of all.

    At the end of the day, Google isn’t “evil” because it penalizes small shops by dropping them in results. It is trying to return “answers” in the first link (sometimes favoring Google products, as Rocky demonstrates). It is also showing relevant images like pictures and video stills, which drop smaller sites further down the screen. At the end of the day, the end-user is the “king” and if he is having trouble finding good deals or relevant info, he will eventually switch to Bing, Amazon, or eBay for product searches and info.

    Comment by Sean Brown (@seanbrown_) — September 23, 2011 @ 9:47 am

  4. [...] This is the last in a multi-part series on Google and antitrust. Part 1 looked at how difficult it would be for a new player to start in Web search today. Part 2 looked at how Google favors its own products in search. [...]

    Pingback by Google and antitrust: looking at the good and bad effects of monopolies « reDesign — September 23, 2011 @ 1:16 pm

  5. Sean Brown,
    Google is harming consumers and possible breaking laws against deceptive practices. FTC already fined them for being deceptive and unfair.

    1. Ads MUST (M-U-S-T) be clearly disclosed. If you still want to click on an ad once you know it’s an ad, more power to you.

    2. “However, let’s look at the content of the ads, and let’s see what gets left out, in trying to determine whether the end result is “evil” or not. The first ad is for store.sony.com/VAIO. It contains six links below, including “VAIO Weekly Deals” and “Compare ALL VAIO Laptops.” These seem like very relevant ads, probably a result of Google’s high-quality (and expensive) ad auction process. The second and third ads are from The Sony Official Store (for the Sony Vaio Y Seriese) and from Target, with a link to buy a 15.5″ Vaio. There are also two pictures of Vaio laptops in the “ads” section.”

    What you said is irrelevant and I’ll just mention one aspect: That ad is not ‘relevant,’ or the most relevant one in terms of price, quality or whatever metric you choose. It’s there because they paid the most for that spot, and Google benefits. So it will cost you, that ad money will be added to your total, indirectly, and you were probably led to buy a more expensive product. They key is that, unless you know it’s an ad, you think that Google placed that #1 because it was best for you. Google tells you all the time but then fools you..

    Comment by Na Name Really — September 24, 2011 @ 7:18 am

  6. [...] in this series, I’ll look at good and bad aspects of monopolies. Share this:FacebookTwitterStumbleUponEmailMoreDiggRedditPrintLike this:LikeBe the first to like this post. Comments [...]

    Pingback by Google and antitrust: How Google favors its own products « reDesign — January 10, 2012 @ 3:11 pm


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